Sustainable Investing and Investment Management

Sustainable investing is important to the sustainability of investing. New skills, mindsets, and strategies will enable you to effectively meet client needs and deliver value.

What Is Sustainable Investing?

Traditional investing delivers value by translating investor capital into investment opportunities that carry risks commensurate with expected returns. Sustainable investing balances traditional investing with environmental, social, and governance-related (ESG) insights to improve long-term outcomes.

In many ways, sustainable investing can be seen as part of the evolution of investing. There is a growing recognition among industry participants that some ESG factors are economic factors, especially in the long term, and it is, therefore, important to incorporate material ESG factors.

There are three critical elements of sustainable investing:

  • Sustainable investing is additive to asset management theory and does not mean a rejection of foundational concepts.
  • Sustainable investing develops deeper insights about how value will be created going forward using ESG considerations.
  • Sustainable investing considers diverse stakeholders, consistent with how companies are developing.

Why Is Sustainable Investing Important?

Interest in sustainable investing continues to grow, and the pressure is on for investment organizations to move toward the sustainable investing model. In an era when the investment industry is challenged by rising end-client and regulatory expectations and challenging economics, the alternative of maintaining the status quo leaves the industry vulnerable to decline.

The next stage of development will depend heavily on industry leadership and innovation in investment thinking and practice, as well as data management. If these are present, the future is exceptionally bright.